At VMworld 2011 in Las Vegas, VMware previewed its tentative plans for fundamental changes in the way storage-related operations will be handled by VM and storage administrators.

At the heart of the plan is a new logical construct dubbed VM volumes (VMV). A VMV contains all the storage instantiations of a Virtual Machine (VM) including its VMDK, clones, snapshots, replicas and QOS parameters.

Also in center stage is the notion of a Capacity Pool. VM administrators would only deal with VMVs and Capacity Pools and no longer have to deal with LUNs. Capacity pools have various data protection, allowed services and performance policies associated with them and can span storage boxes and even datacenters. A VM administrator simply provisions a VMV for a VM by selecting from a Capacity Pool — no more LUNs to deal with.

Capacity Pools, on the other hand, are provisioned by the storage administrator and can be drawn from either NAS or SAN devices depending on the reqirements of that particular Capacity Pool. The storage admin continues to deal with LUNs and mount points but no longer needs to closely coordinate with the VM Admin as long as sufficient Capacity Pools are provisioned.

VMware also plans to address storage performance issues in vSphere environments with the introduction of what was described as an I/O de-multiplexor (demux). This would be a box or a function that sits between the storage and the servers that provides two features. It communicates with vCenter and propagates QOS parameters to the storage subsystem so that what is today a blended salad of essentially random I/O requests becomes a more order set of requests that are serviced according to QOS policies being service today by Storage I/O Control (SIOC) and vStorage DRS. VMware also described the I/O demux as providing a logical channel for I/O, but did not go into much detail.

The second function of the I/O demux is to act as a proxy for communicating “VMspeak” to the storage subsystems in a standardized way. Storage subsystem vendors can then use this information to be fully aware of individual Virtual Machines. Some vendors are already aware of individual VMs, but a standardized set of VMspeak storage protocols will let VMware avoid the custom code or interfaces that it hates as well as potentially enlarge the number of storage vendors who speak VMspeak.

That said, it was also clear from the demonstrations at VMworld 2011 and the slide-ware that VMware’s storage futures are being developed with only a select set of VMware’s partners that include EMC, HP, NetApp, IBM and Dell who have formed what is essentially a cartel. This appears to give an unfair competitive advantage to the cartel members and leaves the smaller storage players out in the cold. Doubtless they will eventually have access to the protocols and SDKs, but how long the lag times will be remains to be seen.

So, did VMware kill LUNs? Yes for the VM administrator and no for the storage administrator.

Did VMware resolve the NAS vs. SAN controversy? No, NAS is still easier to manage and SANs are faster. With Capacity Pools, the VM admin will no longer need to care, but the storage admin will need to indefinitely.

And, yes both type of Admins keep their jobs.

VMware CEO Paul Maritz has made it clear he intends to develop a software mainframe/Cloud operating system and any sophisticated operating system needs a solid I/O system. With this direction VMware is clearly pushing down into the storage stack as it needs to do. But can it go further and still retain a robust market for third party providers? In the short term, probably, but longer term it appears this market is headed for an oligopoly dominated by this new cartel or perhaps a duopoly of VMware and EMC.